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                           Before the
                Federal Communications Commission
                     Washington, D.C. 20554


In the Matter of                 )
                                )
Ryder Communications, Inc.,      )
                                 )    File No. EB-02-MD-038
       Complainant,              )
                                )
               v.                )
                                )
AT&T Corp.,                      )
                                )
       Defendant.                        )   

                  MEMORANDUM OPINION AND ORDER

   Adopted:  July 3, 2003                    Released:  July 7, 
2003

By the Commission:

I.   INTRODUCTION

     1.   In this Memorandum Opinion and Order, we deny a formal 
complaint1 that Ryder Communications, Inc. (``Ryder'') filed 
against AT&T Corp. (``AT&T'') pursuant to section 208 of the 
Communications Act of 1934, as amended (``Communications Act'' or 
``Act'').2  In particular, Ryder has failed to prove that AT&T's 
enforcement of the early service termination provision contained 
in the parties' contract tariff for 900 transport service was 
unjust and unreasonable under section 201(b) of the Act.3   This 
conclusion rests on the principle that where two parties, through 
valid contracts, have clearly allocated the risk of certain 
events, it is not unjust and unreasonable under section 201(b) 
for one party to hold the other party to this contractual 
allocation.

II.  BACKGROUND

     II.A.     The Parties

     2.   During its existence as a going concern, Ryder was a 
``service bureau'' and a 900 pay-per-call provider of information 
services to marketers and media companies.4  AT&T is a national 
and international provider of telecommunications services, as 
well as a provider of transport services for 900 number calls.5  
During the period covered by the Complaint, AT&T also provided, 
in addition to tariffed telecommunications services, certain non-
tariffed services, including billing and collection services.6 

     II.B.     The Parties' Business Relationship

     3.   In 1992, AT&T began providing 900 transport service to 
Ryder for Ryder's 900 pay-per-call operations.7   From 1992 until 
1997, AT&T provided this 900 transport service to Ryder pursuant 
to AT&T Tariff F.C.C. No. 1 (``Tariff No. 1'').8  

     4.   In January 1997, AT&T and Ryder entered into a 
contract, also referred to as a Custom Offer Agreement, under 
which AT&T agreed to provide 900 transport service to Ryder for a 
period of three years at discounted usage rates based on Ryder's 
volume of  900 calls.9  In exchange for these volume discounts, 
Ryder agreed to meet certain prescribed ``Minimum Annual Revenue 
Commitments (``MARC''),'' regardless of whether it actually 
incurred sufficient volume to generate such revenue in usage 
charges.10   Specifically, Ryder agreed to a minimum commitment 
to AT&T of $600,000 in 900 transport service usage charges per 
year for three years;11 Ryder also agreed with AT&T that, in the 
event Ryder discontinued service prior to the expiration of the 
three year term, AT&T could charge Ryder an early service 
termination fee in ``an amount equal to 100% of the unsatisfied 
MARC for each year remaining in the Custom Offer Agreement 
term.''12  Ryder further agreed with AT&T that the early service 
termination provision in the parties' contract would supercede 
the early service termination provision in Tariff No. 1.13   In 
addition, the parties agreed to incorporate the limitation of 
liability provisions in Tariff No. 1,14 under which AT&T remained 
liable for damages caused by any willful misconduct in its 
provision of tariffed services.15 

     5.   AT&T filed the parties' contract with the Commission as 
Contract Tariff No. 6831 (``CT 6831'').16  CT 6831 became 
effective on April 15, 1997.17   

     6.   In addition to 900 transport service, AT&T also 
provided billing and collection services to Ryder pursuant to a 
billing services agreement executed by both parties, effective as 
of January 1995 (``Billing Agreement'').18  Under the Billing 
Agreement, AT&T agreed to obtain usage records for calls placed 
to the 900 numbers served by Ryder, to bill the calling party for 
such calls at the charges established by Ryder, to collect 
payment from the callers, and to remit to Ryder the net amount of 
such collections after deducting AT&T's rates for 900 transport 
service, any charges disputed by callers, federal, state, and 
local taxes, and AT&T's billing service fee.19  The parties did 
not file this Billing Agreement with the Commission as a contract 
tariff, because the Commission had mandatorily detariffed billing 
and collection services.20

     7.   The Billing Agreement stated explicitly that ``charges 
for tariffed services will not be abated or refunded in the event 
of delay or failure of performance of this Agreement.''21  In 
addition, regarding any harm to Ryder that might result from 
AT&T's inadequate performance of billing and collection services, 
the Billing Agreement expressly limited AT&T's potential 
liability to Ryder to ``direct damages,'' excluding, inter alia, 
``incidental, indirect, special, or consequential damages....''22  
Lastly, the Billing Agreement provided that it was governed by 
the laws of the State of New Jersey.23

     8.   Although the record in this proceeding does not 
indicate that Ryder experienced any problems with the 900 
transport service it received from AT&T pursuant to CT 6831,24 
Ryder did experience some problems (of disputed nature and 
magnitude) with the billing and collection services AT&T 
provided.25  After experiencing these billing and collection 
problems, Ryder terminated all of its employees and closed its 
900 pay-per-call business on June 25, 1997.26  On July 24, 1997, 
approximately three months after CT 6831 became effective, Ryder 
formally notified AT&T that it was canceling all 
telecommunications services under CT 6831 and directed AT&T to 
disconnect all 900 telephone numbers assigned to it.27  

     9.   As a result of Ryder's decision to cease purchasing 
telecommunications services from AT&T and close its business, 
Ryder failed to meet its MARC under CT 6831.28  Consequently, 
pursuant to the terms of the early service termination provision 
in CT 6831, AT&T notified Ryder, by letter dated November 3, 
1997, of Ryder's liability to AT&T in the amount of approximately 
$1.6 million in early service termination charges.29 

     II.C.     The Federal District Court Proceeding

     10.  On May 12, 1999, Ryder filed a complaint against AT&T 
in state court in Florida alleging that AT&T had breached its 
obligations under the Billing Agreement.30  Ryder alleged that 
AT&T had failed to timely and accurately account for and remit to 
Ryder proceeds that AT&T had collected from Ryder's customers on 
Ryder's behalf under the Billing Agreement.31  Claiming that 
AT&T's breach of the Billing Agreement had depleted Ryder's 
revenue stream to the point that it was forced out of business, 
Ryder sought damages for its lost revenues, its company's value 
as a going concern, and other costs.32  Ryder's Court Complaint 
did not allege that AT&T had violated CT 6831 or that any 
provision of CT 6831, including the early service termination 
provision, violated the Communications Act.33

     11.  After removing Ryder's complaint to the United States 
District Court for the Southern District of Florida (``District 
Court'' or ``Court''), AT&T filed an answer and counterclaims 
against Ryder.34   AT&T's counterclaims alleged, inter alia, that 
Ryder breached CT 6831 by terminating service before the end of 
the three-year term, failing to meet its MARC, and then refusing 
to pay early service termination charges; thus, AT&T further 
alleged that, pursuant to the early service termination provision 
in CT 6831, Ryder owed AT&T approximately $1.6 million for unpaid 
tariff charges.35  In response, Ryder asserted that its 
obligations under CT 6831's early service termination provision 
should be excused, because it was AT&T's ``negligence, gross 
negligence, and willful breach'' of the Billing Agreement that 
caused Ryder to incur those obligations, and AT&T should not be 
permitted to benefit from its own wrongful action.36  Again, 
Ryder did not allege, either by way of counterclaim or 
affirmative defense, that AT&T had violated CT 6831 or that any 
provision of CT 6831, including the early service termination 
provision, violated the Communications Act.37  

     12.    From the early stages of the District Court 
proceeding, Ryder took the position that it could recover 
consequential damages, including recoupment/cancellation of the 
early service termination charges due under CT 6831, as part of 
its damages for AT&T's alleged breach of the Billing Agreement.38  
Ryder took this position despite the Billing Agreement's express 
exclusion of liability for consequential damages, and despite the 
Billing Agreement's clear statement that charges for tariffed 
services would not be abated or refunded in the event of a 
billing ``delay or failure of performance.''39 

     13.  In at least two separate rulings, the District Court 
squarely rejected Ryder's position, holding that Ryder could not 
include as consequential damages arising from any breach by AT&T 
of the Billing Agreement the early service termination charges 
owed by Ryder under CT 6831.40  The District Court held, in other 
words, that AT&T could collect and retain early service 
termination charges from Ryder, notwithstanding a breach by AT&T 
of the Billing Agreement.  In so ruling, the Court upheld the 
validity of the Billing Agreement's liability limitation 
provision under New Jersey law, because Ryder had failed to show 
that AT&T's breach of the Billing Agreement was willful and 
wanton. 41  As a result, the District Court limited Ryder's 
potential recovery to ``direct damages,'' meaning any funds that 
AT&T might have wrongfully withheld from Ryder.42 

     14.  After a week long trial, the jury returned a verdict in 
favor of Ryder on its claim against AT&T alleging a breach of the 
Billing Agreement, and awarded Ryder $984,795.38 in ``direct 
damages,'' the amount that AT&T had wrongfully withheld.43  The 
jury also returned a verdict against AT&T on its counterclaim 
against Ryder for early service termination charges, finding that 
Ryder's failure to meet its MARC under CT 6831 should be excused 
because of AT&T's grossly negligent provision of 900 transport 
services under CT 6831.44

     15.  In a Post-Trial Order issued on January 31, 2001, the 
District Court upheld the jury's verdict in favor of Ryder on its 
claim against AT&T for breach of the Billing Agreement.45  The 
District Court overruled the jury's verdict denying AT&T's 
counterclaim, however, because ``there was simply no evidence 
that there were any irregularities or problems with the 900 
transport services provided by AT&T to Ryder'' under CT 6831.46  
The Court therefore granted as a matter of law AT&T's 
counterclaim for early service termination charges, finding that 
``it is uncontested that Ryder breached the Contract Tariff 
Agreement'' by failing to meet its MARC.47  

     II.D.     The Federal District Court's Referral

     16.  In its January 31, 2001 Post-Trial Order, upon finding 
in favor of AT&T on its counterclaim for early service 
termination charges, the Court did not simply award those charges 
to AT&T.  Instead, the Court observed a significant difference 
between the charges that Ryder  owed under CT 6831's early 
service termination provision and the charges that Ryder would 
have owed under Tariff No. 1's early service termination 
provision.48  This led the Court to ask ``whether it is 
permissible to abrogate the Tariff No. 1's discontinuance clause 
in such a manner.''49  The Court  then stated that, ``in the 
present case, it is conceivable that a nearly $1,600,000.00 
termination penalty, which is what application of the Tariff 
Agreement's [CT 6831's] discontinuance provision amounts to, may 
be considered an unreasonable and unenforceable tariff 
practice.''50  Without further explanation, the Court concluded 
that, pursuant to the primary jurisdiction doctrine, it should 
refer to the Commission ``the issue of the appropriate measure of 
damages for Ryder Communications, Inc.'s  breach'' of CT 6831.51

     II.E.     Ryder's Commission Complaint

     17.  On December 13, 2002, almost two years after the 
District Court's referral order, Ryder filed the instant 
Complaint against AT&T.52  The Complaint claims that AT&T's 
enforcement of CT 6831's early service termination provision 
violates the reasonableness standard of section 201(b) of the 
Act, because it was AT&T's own breaches of the Billing Agreement 
that caused Ryder to go out of business, which, in turn, caused 
Ryder to miss its MARC and incur early service termination 
charges under CT 6831.53  The Complaint also claims that, on its 
face, CT 6831's early service termination provision violates the 
reasonableness standard of section 201(b) of the Act, because the 
provision applies even when AT&T's own misconduct causes a 
customer to terminate service early and incur charges 
thereunder.54  For the reasons described below, we deny both 
claims.55

III.      DISCUSSION

     III.A.    CT 6831 Lawfully Superceded Tariff No. 1.

     18.  The District Court clearly directed the parties to 
present to the Commission the following issue:  whether the 
parties lawfully could, by agreement, agree to be bound by the 
early service termination provision in CT 6831 rather than the 
early service termination provision in Tariff No. 1, given that 
the former triggers a significantly higher charge than the 
latter.56  The resolution of that issue is equally clear.  As the 
parties correctly stipulate, it is a settled point of law that a 
contract tariff may lawfully take precedence over the provisions 
of a generally filed tariff.57  It is well established that, 
under the Communications Act, carriers are not limited to 
offering service subject to generic tariffs, but may also operate 
pursuant to individually negotiated contract tariffs that 
supercede the generic tariff on file for the same service.58   
Since 1991, the Commission has specifically allowed AT&T to offer 
service pursuant to contract tariffs, like CT 6831, that contain 
minimum volume commitments by the customer for each service.59  
Consequently, we conclude that the early service termination 
provision in CT 6831 lawfully superceded the early service 
termination provision of Tariff No. 1, even though the former 
triggers a higher charge than the latter.  We note that the 
higher charge triggered by CT 6831's early service termination 
provision should not be viewed in isolation, but rather as a quid 
pro quo for CT 6831's lower usage charges (as compared to Tariff 
No. 1). 60


     III.B.    CT 6831's Early Service Termination Provision 
          Complies with the Reasonableness Standard of Section 
          201(b), Both As Applied and On Its Face.

     19.  The District Court did not state clearly what 
additional issues, if any, it expected the parties to present to 
the Commission, other than the issue addressed in Part III(A) 
above.  As a result, Commission staff spent considerable time 
with the parties, both before and after the instant Complaint was 
filed, discussing how properly to frame the issues presented, 
with all sides expressing varying viewpoints.61  We are not 
completely confident (nor is AT&T) that Ryder's Complaint 
comports with the intent of the District Court's referral 
order.62  Nevertheless, because the ultimate responsibility for 
presenting referred issues to the Commission lies with the 
parties (as the District Court recognized),63 and because we want 
to assist the District Court as much and as quickly as possible, 
we proceed below to consider the issues as framed by Ryder's 
Complaint.64

          III.B.1.  Enforcement of the Early Service  Termination 
               Provision  in   CT   6831  Is   Not   Unjust   and 
               Unreasonable in the Present Case.

     20.  Ryder argues that AT&T's breach of the Billing 
Agreement caused Ryder to go out of business, which, in turn, 
caused Ryder to miss its MARC and incur early service termination 
charges under CT 6831.65  Ryder contends, therefore, that 
permitting AT&T to enforce CT 6831's early service termination 
provision would unreasonably allow AT&T to profit from its own 
misconduct.66  Ryder maintains, in other words, that we should 
preclude AT&T from collecting any damages (in the form of early 
service termination charges) for Ryder's admitted breach of CT 
6831.67  For the following reasons, we disagree.68

     21.  As Ryder itself repeatedly observes, the parties 
deliberately designed CT 6831 and the Billing Agreement to 
operate symbiotically and to define the parameters of the 
parties' business relationship.69  As part of that conscious 
design, the parties expressly allocated the risk that AT&T might 
breach the Billing Agreement and thereby harm Ryder:  AT&T would 
have to pay Ryder ``direct damages'' arising from the breach, but 
Ryder would still have to pay AT&T any charges incurred under CT 
6831, subject to Ryder's recoupment of those charges as 
consequential damages if AT&T's breach of the Billing Agreement 
constituted willful and wanton misconduct.  Put differently, AT&T 
assumed the risk of paying direct damages, whereas Ryder assumed 
the risk of incurring consequential damages, unless AT&T's breach 
was willful and wanton.70 

     22.  In particular, the Billing Agreement plainly states 
that ``charges for tariffed services will not be abated or 
refunded in the event of delay or failure of performance of this 
Agreement.''71  Thus, according to the Billing Agreement, charges 
incurred by Ryder under CT 6831 remain due, even if AT&T breaches 
the Billing Agreement.  The Billing Agreement also provides that, 
if AT&T breaches the Billing Agreement, AT&T will be liable to 
Ryder only for ``direct damages,'' and not ``consequential 
damages,'' arising from the breach; however, the Billing 
Agreement specifies New Jersey law as governing, and New Jersey 
law (according to the District Court in this matter) precludes 
limitations on liability for willful and wanton misconduct.72  
Consequently, in sum, the deal that the parties reached under the 
Billing Agreement is as follows: if AT&T breaches the Billing 
Agreement, Ryder still has to pay AT&T all charges incurred under 
CT 6831, but AT&T has to pay Ryder direct damages arising from 
the breach, and also has to pay any consequential damages arising 
from the breach, potentially including return of early service 
termination charges, if AT&T's breach was willful and wanton.

     23.  Ryder tried and failed to show in the court proceeding 
that AT&T's breach of the Billing Agreement constituted willful 
and wanton misconduct.73  Moreover, Ryder does not dispute here 
the interpretation of the Billing Agreement described above.74  
In addition, the District Court found, and Ryder does not contest 
here, that Ryder breached CT 6831 by terminating service before 
the end of the three-year term, failing to meet its MARC, and 
then refusing to pay early service termination charges.  
Furthermore, a filed federal tariff is presumed lawful, and the 
filing carrier must enforce the tariff's terms.75  Given all of 
these circumstances, it is perfectly reasonable under section 
201(b) for AT&T to seek the benefit of its bargain -- payment by 
Ryder of the early service termination charges incurred under CT 
6831.

     24.  Indeed, Ryder essentially concedes that CT 6831 and the 
Billing Agreement, as written, preclude its claims.  Ryder 
argues, therefore, that we should effectively rewrite CT 6831 so 
Ryder can avoid the allegedly harsh results of the parties' 
deal.76  In making that argument, Ryder relies, in part, on the 
``Sierra-Mobile doctrine.''77  Ryder's reliance is misplaced.  
Under the principles of the Sierra-Mobile doctrine, the 
Commission may effectively alter the terms of a contract tariff 
at the behest of one of the original negotiating parties, but 
only if there exists a compelling public interest in doing so, or 
convincing evidence of unfairness in the contract formation 
process.78  Moreover, ``[t]he threshold for demonstrating 
sufficient harm to the public interest to warrant contract 
reformation under the Sierra-Mobile doctrine is much higher than 
the threshold for demonstrating unreasonable conduct under 
Sections 201(b) and 202(a) of the Act.''79 This preserves the 
integrity of contracts, which is vital to the proper functioning 
of any commercial enterprise, including the communications 
market.  In fact, the long-term health of the communications 
market depends on the certainty and stability that stems from the 
predictable performance and enforcement of contracts.80  Here, as 
explained below, Ryder shows neither a compelling public interest 
nor unfairness in the formation of CT 6831.

     25.  Ryder makes some general assertions that it lacked 
bargaining power in its negotiations with AT&T and thus had no 
choice but to accept the ``boilerplate'' aspects of CT 6831, 
including the early service termination provision.81  AT&T 
effectively rebuts these assertions with evidence that its 
negotiations with Ryder were ``extensive, and included a healthy 
`give and take' with respect to the terms and conditions of the 
agreements.''82  AT&T also states convincingly that the early 
service termination provision was a quid pro quo for the reduced 
rates that Ryder had achieved through hard bargaining.83  
Therefore, Ryder falls far short of demonstrating the kind of 
unfairness that might warrant reformation of CT 6831.84

     26.  Ryder maintains that reforming CT 6831's early service 
termination provision so as to vitiate Ryder's liability 
thereunder would serve a compelling public interest by preventing 
carriers from using boilerplate contract provisions to insulate 
themselves from the consequences of their own misconduct.85  
Ryder overlooks several key facts:  the Commission detariffed the 
services at issue here, and as far as the record shows, no other 
party opted into CT 6831 or has agreed in negotiations to a 
contract provision that would harm them in the manner claimed by 
Ryder here.86  Thus, Ryder's assertion that we need to protect 
others from suffering the same fate as Ryder rests on sheer 
speculation.

     27.  Moreover, and perhaps most importantly, Ryder's own 
description of the parties' business relationship reveals that 
Ryder could have foreseen, and thus sought to address differently 
in the agreements, the very circumstances that allegedly occurred 
here.  In particular, Ryder emphasizes repeatedly the 
interrelationship between the parties' two agreements, and 
highlights the fact that its ability to meet its MARC under CT 
6831 depended on the cash flow that it received from AT&T under 
the Billing Agreement.87  Thus, Ryder knew or should have known 
that a breach by AT&T of the Billing Agreement might cause a 
breach by Ryder of CT 6831. Yet the record contains no evidence 
that Ryder sought to allocate the risk of that occurrence in any 
manner other than what presently appears in the agreements:  
Ryder would remain liable for early service termination charges, 
while AT&T would be liable for direct damages if its breach was 
not willful and wanton, or direct and consequential damages 
(including return/cancellation of any early service termination 
charges) if its breach was willful and wanton (and the Court has 
ruled that AT&T's breach was not willful and wanton).88

     28.  Given these circumstances, revising CT 6831 so as to 
eliminate Ryder's responsibility to pay early service termination 
charges would serve only Ryder's private economic interest, not a 
public interest.  In fact, revising CT 6831 in that manner would 
contravene the strong public interest in preserving the sanctity 
of contracts, especially because the MARC and its attendant 
termination charges were principal components of the exchange for 
reduced rates.  As AT&T states aptly:  ``There is simply no 
justification for allowing a customer to negotiate for 
concessions on price, to sign a contract containing customized 
provisions that are the product of voluntary agreement, and then 
to run to the Commission to have the Commission reform a 
provision of the contract that was an integral part of the quid 
pro quo bargain but which subsequently produces hardship to the 
customer.''89

     29.  Buttressing our conclusion is Ryder's insistence that 
we need not, and probably should not, disturb any of the District 
Court's rulings.90  We agree with Ryder, but accepting the 
District Court's rulings as given almost compels denial of 
Ryder's claim, as Ryder has chosen to present it.  Here again are 
the relevant Court rulings:  (1) Ryder breached CT 6831 by 
terminating service before the three-year term had ended, missing 
its revenue commitments, and then refusing to pay early service 
termination charges; (2) AT&T provided transport service to Ryder 
in accordance with the requirements of CT 6831; and (3) although 
AT&T breached the Billing Agreement by wrongfully withholding 
certain funds, Ryder's damages are limited by the Agreement and 
New Jersey law to receipt of those funds, because AT&T's breach 
of the Agreement was not willful and wanton.  Taken together, 
these rulings leave little room for Ryder to escape liability for 
the early service termination charges.  

     30.  At bottom, all that Ryder actually proffers to support 
its claim is a simplistic notion of fairness:  AT&T harmed Ryder 
first, so AT&T should not be allowed to recover anything from 
Ryder.  What Ryder ignores is that Ryder expressly agreed, in 
exchange for reduced per-minute rates, to allow AT&T to recover 
early service termination charges in the very circumstances that 
allegedly occurred here.  Thus, what would really be unfair would 
be to permit Ryder to shirk its contractual commitments and to 
deprive AT&T of the benefit of its bargain.

     31.  In sum, for the reasons stated above, AT&T's 
enforcement of CT 6831's early service termination provision 
comports with the reasonableness requirement of section 201(b) of 
the Act.  Consequently, we deny Count Two of Ryder's Complaint.

          III.B.2.  The Early Service Termination Provision in CT 
               6831 Is Not Unjust and Unreasonable On Its Face. 

     32.  Ryder asserts that the early service termination 
provision in CT 6831, on its face, violates the reasonableness 
requirement of section 201(b) of the Act, because the provision 
contains no express abrogation of its effect in the event that 
AT&T's misconduct causes the customer to terminate service 
early.91  For the following reasons, we disagree.

     33.  The Commission has consistently allowed carriers to 
include provisions in their tariffs that impose early termination 
charges on customers who discontinue service before the 
expiration of a long-term discount rate plan containing minimum 
volume commitments.92  Many of these provisions required 
individual customers, like Ryder, to pay charges similar, if not 
equivalent to, the charges that the customers would have paid had 
they continued service and fulfilled their minimum volume 
commitments.93  In approving these provisions, the Commission 
recognized implicitly that they were a valid quid pro quo for the 
rate reductions included in long-term plans.94  The Commission 
has acknowledged that, because carriers must make investments and 
other commitments associated with a particular customer's 
expected level of service for an expected period of time, 
carriers will incur costs if those expectations are not met,  and 
carriers must be allowed a reasonable means to recover such 
costs. 95  In other words, the Commission has allowed carriers to 
use early service termination provisions to allocate the risk of 
investments associated with long term service arrangements with 
their customers.  Given this history of Commission approval of 
early service termination provisions similar to the one at issue 
here, and the reasonable goals that they generally serve, Ryder 
must provide convincing reasons why we should hold that CT 6831 
is unlawful on its face.

     34.  As stated above, Ryder claims that CT 6831's early 
service termination provision is facially unlawful because it 
does not include a way for a customer to avoid the payment of 
termination charges if AT&T somehow causes the customer to 
terminate service before the expiration of the contract period.  
Although Ryder accurately describes the provision, Ryder 
overlooks another part of CT 6831 that ameliorates Ryder's 
concern.  In particular, CT 6831 incorporates by reference 
certain aspects of Tariff No. 1, including a section stating that 
AT&T's ``liability, if any, for its willful misconduct is not 
limited by this tariff.''96  Consequently, under CT 6831, if AT&T 
were to engage in willful misconduct in its provision of 
transport service and thereby cause a customer to terminate 
service early and incur termination charges, the customer could 
seek to recover those charges as damages for AT&T's misconduct.  
Indeed, that is precisely what Ryder tried and failed to do in 
the court proceeding, and Ryder failed only because it provided 
no evidence of any misconduct by AT&T in the provision of 
transport service.  Thus, contrary to Ryder's assertion, CT 6831 
does, in fact, provide a means for a customer ultimately to avoid 
paying early service termination charges if AT&T's misconduct 
causes the early termination.

     35.  Ryder complains that Tariff No. 1's liability 
limitation provision does not save CT 6831's early service 
termination provision, because it only gives a customer a 
potential cause of action for recovery of charges rather than an 
immediate immunity from paying the charges in the first place.  
What Ryder seems to be saying is that, in order to pass muster, 
CT 6831 must excuse payment of early service termination charges 
immediately upon a customer's mere assertions that AT&T has 
engaged in willful misconduct and that the misconduct has caused 
the customer to terminate service, before AT&T has the 
opportunity to dispute either assertion.97  We disagree.  Given 
the investments that AT&T must make to accommodate a substantial 
long-term contract, we do not believe that the Act's 
reasonableness standard requires AT&T to allow the customer to 
make those unilateral determinations in the first instance.  The 
reality is that, if the parties intractably disagree about 
whether AT&T engaged in willful misconduct and/or whether such 
misconduct caused the customer to terminate service early, 
litigation will ensue.  Whether CT 6831 requires the customer to 
pay termination charges pending the outcome of such litigation is 
not a matter on which section 201(b) dictates an outcome either 
way.

     36.  Ryder further complains that Tariff No. 1's liability 
limitation provision does not save CT 6831's early service 
termination provision, because it fails to address a situation 
where AT&T's misconduct concerns something other than AT&T's 
provision of transport service, but still causes the customer to 
terminate service early.98  Tariffs filed with the Commission 
ordinarily do not address matters other than the provision of 
communications services offered therein.99  Consequently, CT 
6831's failure to do so is certainly not facially unreasonable.  
In particular, CT 6831's failure to anticipate every conceivable 
situation where AT&T's conduct might cause Ryder harm is not 
unreasonable.  This is especially true because, as described 
above, Ryder knew of the foreseeable risks and voluntarily agreed 
to allocate them as set forth in the parties' contracts.  
Moreover, we cannot prejudge that Ryder's remedies outside CT 
6831 would be inadequate.  

     37.  Ryder also contends that, for the same reason that the 
Commission prohibits carriers from using tariff provisions to 
insulate themselves from liability for willful misconduct,100 the 
Commission here should prohibit AT&T from using CT 6831 to profit 
from its willful misconduct.101  Ryder's analogy is flawed.  As 
explained above, CT 6831 does, in fact, preclude AT&T from 
profiting from its willful misconduct with respect to the 
relevant service.  If AT&T harms a customer via willful 
misconduct in the provision of transport services, CT 6831 allows 
the customer to seek the recovery of damages, including 
recoupment/cancellation of early service termination charges.

     38.  In sum, CT 6831's early service termination  provision, 
read in context, comports with the reasonableness requirement  of 
section 201(b).   Consequently,  we  deny Count  One  of  Ryder's 
Complaint.

IV.  ORDERING CLAUSES

     39.   ACCORDINGLY, IT IS ORDERED, pursuant to sections 4(i), 
4(j), 201(b), and 208 of the Communications Act of 1934, as 
amended, 47 U.S.C. §§ 154(i), 154(j), 201(b), 208, that the 
Complaint of Ryder Communications, Inc. IS DENIED.

                              FEDERAL COMMUNICATIONS COMMISSION



                              Marlene H. Dortch
                              Secretary


          

  



_________________________

1    Formal Complaint of Ryder Communications, Inc., File No. EB-
02-MD-038 (filed Dec. 13, 2002) (``Complaint'').
2    47 U.S.C. § 208.
3    47 U.S.C. § 201(b).
4    Second Revised Joint Statement, File No. EB-02-MD-038 (filed 
Mar. 14, 2003) (``Joint Statement'') at 2, ¶ 3; Complaint at 2, ¶ 
2.  According to AT&T, a service bureau acts as an intermediary 
between 900 pay-per-call information providers and long distance 
telephone companies, such as AT&T, and provides the physical 
facilities through which an information provider operates its 
programs and connects to a long distance carrier.  See Answer of 
AT&T Corp., File No. EB-02-MD-038 (filed Feb. 3, 2003) 
(``Answer'') at 29, n.5.
5    Joint Statement at 2, ¶ 6.
6    Joint Statement at 2-3, ¶ 8; Complaint at 5-6, ¶ 11; Answer 
at 28-29, ¶¶ 52-53; Reply of Ryder Communications, Inc., File No. 
EB-02-MD-038 (filed Feb. 10, 2003) (``Reply'') at 10-11, ¶ 14.
7    Joint Statement at 3, ¶ 12.  AT&T marketed the 900 transport 
service under the name ``AT&T MultiQuest'' service.  Id. at 3, ¶ 
13.
8    Joint Statement at 3, ¶ 13; Answer, Ex. 28 (AT&T Tariff 
F.C.C. No. 1).
9    Joint Statement at 4, ¶¶ 15-16, 20; Answer at 31, ¶ 59, and 
at Ex. 30 (Custom Offer Agreement (COA) No. CX003), Section 2, 
``COA Term; Renewal Options'', Section 5, ``Discounts'' 
(indicating that specified monthly discounts ranged from at least 
12.50% to 18.25% based on usage, and that additional discounts 
also applied)). 
10 Joint Statement at 4, ¶ 16, 20; Complaint at 5, ¶ 10; Answer 
at 31, ¶¶ 59-60, and at Ex. 30 (COA No. CX003), Section 3, 
``Minimum Commitments/Charges;'' Complaint, Ex. E-6 (CT 6831) at 
Section 3, ``Minimum Commitments/Charges.''  
11   Complaint,  Ex.  E-6  (CT  6831)  at  Section  3,  ``Minimum 
Commitments/Charges;'' Answer  at  Ex.  30  (COA  No.  CX003)  at 
Section 3, ``Minimum Commitments/Charges.''
12   Answer at Ex. 30 (COA No. CX003) at 6(D), 
``Discontinuance''; Complaint, Ex. E-6 (CT 6831) at Section 6(D), 
``Discontinuance'' (``early service termination provision''); 
Joint Statement at 4-5, ¶ 21.
13  Answer at Ex. 30 (COA No. CX003) at 6(D), ``Discontinuance''; 
Complaint, Ex. E-6 (CT 6831) at Section 6(D), ``Discontinuance;'' 
Joint Statement at 5, ¶ 22.   
14  Answer,  Ex.  30  (COA  No.  CX003),  Section  1,  ``Services 
Provided;'' Complaint, Ex. E-6  (CT 6831), Section 1,  ``Services 
Provided.''  Section 1 of  CT 6831 and COA  No. CX003 state  that 
Tariff No. 1 is ``incorporated herein by reference.''  Id.   
15  Section 2.3.1.A of Tariff No. 1 states: ``The Company's 
liability, if any, for its willful misconduct is not limited by 
this tariff.''  Answer, Ex. 28 (Tariff No. 1), Section 2.3.1.A.    
16  Pursuant to Commission rules in effect during the relevant 
period, AT&T was required to file a tariff summarizing the terms 
of the parties' contract. Competition in the Interstate 
Interexchange Marketplace, Report and Order, 6 FCC Rcd 5880, 
5902-03, ¶ 121 (1991) (subsequent history omitted) 
(``Interexchange Competition Order''); 47 C.F.R. § 61.55 (1991).  
The Commission later mandatorily detariffed interstate, domestic, 
interexchange services, including 900 transport service, provided 
by AT&T and other nondominant interexchange carriers.  Policy and 
Rules Concerning the Interstate, Interexchange Marketplace, 
Implementation of Section 254(g) of the Communications Act of 
1934, Second Report and Order, 11 FCC Rcd 20730 (1996), recon., 
12 FCC Rcd 15014 (1997), stay granted, MCI Telecommunications 
Corp. v. FCC, No. 96-1459 (D.C. Cir. Feb. 13, 1997); Order on 
Reconsideration, 12 FCC Rcd 15,014 (1997) (``Domestic Detariffing 
Order on Reconsideration''); Second Order on Reconsideration and 
Erratum, 14 FCC Rcd 6004 (1999) (``Domestic Detariffing Second 
Order on Reconsideration''); stay lifted and aff'd, MCI WorldCom  
v. FCC, 209 F.3d 760 (D.C. Cir. April 28, 2000), Memorandum 
Report and Order, 15 FCC Rcd 22321 (Com. Car. Bur. 2000) 
(``Domestic Transition Order''); Common Carrier Bureau Extends 
Transition Period for Detariffing Consumer Domestic Long Distance 
Services, Public Notice, 16 FCC Rcd 2906 (Com. Car. Bur.  2001); 
Joint Statement at 4, ¶ 18; Complaint, Ex. E-6 (CT 6831).
17  Joint Statement at 4, ¶ 18; Complaint, Ex. E-6 (CT 6831).    
CT 6831 and COA No. CX003 contain identical terms, with the only 
difference being that AT&T filed CT 6831 in standard tariff 
format in accordance with the Commission's requirements.  See 47 
C.F.R. §§ 61.54, 61.55 (1991).  Although CT 6831 was available to 
any other customer ``similarly situated'' to Ryder (Complaint, Ex 
E-6 (CT 6831) at original page 4, ``Availability''), no other 
party ordered service from AT&T under CT 6831.   Supplement to 
Answer of AT&T Corp, File No. EB-02-MD-038 (filed Feb. 6, 2003) 
(``Supplemental Answer'') at 24, ¶ 58.
18  Joint Statement at 5, ¶ 24; Answer, Ex. 32 (Billing  Services 
Agreement).    AT&T   refers  to   these  billing   services   as 
``MultiQuest'' premium billing services.  See Answer at 11-12,  ¶ 
7.
19  Joint Statement at 5, ¶ 27; Complaint at 5-6, ¶ 11; Answer at 
31-32, ¶ 61, and at Ex. 32 (Billing Services Agreement) at ¶¶  1-
3, ``Billing  Services,''  ``Caller  Inquiry  and  Adjustments,'' 
``Charges/Remittance.''
20 See Detariffing of Billing and Collection Services, Report and 
Order, 102 F.C.C.2d 1150 (1986) (``Billing Detariffing  Order''); 
AT&T 900 Dial-It Services and Third Party Billing and  Collection 
Services, Memorandum Opinion  and Order,  4 FCC  Rcd 3429  (1989) 
(``900 Dial-It Order'').
21  Answer, Ex. 32 (Billing Services Agreement) at ¶ 12, 
``Tariffed Services.''
22   Answer,  Ex.  32  (Billing  Services  Agreement)  at  ¶  14, 
``Limitations of Liability.''  The  Billing Agreement states,  in 
pertinent part, that ``AT&T's entire liability [to Ryder] for any 
damages caused by  AT&T's performance of  billing services  under 
this agreement  regardless  of the  form  of action,  whether  in 
contract, tort including negligence, or  otherwise. . . shall  be 
limited to direct damages  which are proven in  an amount not  to 
exceed $100,000. . . . AT&T  shall not be liable for  incidental, 
indirect, special, or consequential damages or for lost  profits, 
savings or revenues  of any kind,  whether or not  AT&T has  been 
advised of the possibility of such damages.''  Id.  Consequential 
damages are damages, loss,  or injury that  do not flow  directly 
and immediately from the act of the party, but only from some  of 
the consequences or results of such act.  See, e.g., Black's  Law 
Dictionary (Pocket ed. 1996).
23  Joint Statement at 5, ¶  29; Answer Ex. 32 (Billing  Services 
Agreement) at ¶ 18G, ``General.''
24 See, e.g., Complaint, Exhibit E-2 (Post-Trial Order, Case  No. 
99-6688-CIV-HIGHSMITH, Jan. 31, 2001, U.S.D.C., Southern District 
of Florida) (``Post-Trial Order'') at 8 (stating that ``there was 
simply no evidence that there were any irregularities or problems 
with the phone services provided by AT&T to Ryder Communications, 
Inc.'').  
25  See, e.g., Complaint at 4, 6-7, 13, ¶¶ 8, 12, 24; Answer at 
12-13, 16, 23-24, ¶¶ 8, 12, 24; Complaint, Ex. E-2 (Post-Trial 
Order) at 4-5 (finding that AT&T breached the Billing Agreement).
26  Joint Statement at 6, ¶ 35.
27  Joint Statement at 7, ¶ 37.
28  Joint Statement at 7, ¶ 38.
29  Joint Statement at 7, ¶ 40; Answer, Ex. 36 (Letter from 
Robert S. Iacuone, AT&T, to David Ryder, Nov. 3, 1997).  
According to AT&T, AT&T also sent a final bill to Ryder in June 
1998 showing that, after netting the termination charges against 
the amounts due Ryder from AT&T under the Billing Agreement, 
Ryder owed AT&T over $1.4 million.  Answer at 35, ¶ 72.
30  Joint Statement at 7, ¶ 41; Answer, Ex. 1 (Complaint, Ryder 
Communications, Inc. v. AT&T Corp., filed May 17, 1999, Broward 
County, Florida) (``Court Complaint'') at 2-3, ¶¶ 11-16.
31  Answer, Ex. 1 (Court Complaint) at 3, ¶¶ 12-16.
32  Answer, Ex. 1 (Court Complaint) at 3, ¶¶ 12-16.
33  Joint Statement at 8, ¶ 46.
34  Joint Statement at 7, ¶ 43; Answer, Ex. 2 (Answer and 
Counterclaims of AT&T Corp., Ryder Communications, Inc. v. AT&T 
Corp., Case No. 99-6688-CIV-HIGHSMITH, filed June 14, 1999, 
U.S.D.C., Southern District of Florida) (``AT&T Court Answer and 
Counterclaims'').
35  Joint Statement at 8, ¶ 44; Answer, Ex. 2 (AT&T Court Answer 
and Counterclaims), at 9-10, ¶¶ 49-54.
36  Joint Statement at 8, ¶ 46; Answer, Ex. 3 (Ryder 
Communications, Inc.'s Answer and Affirmative Defenses to AT&T's 
Counterclaim, Case No. 99-6688-CIV-HIGHSMITH, filed June 14, 
1999, U.S.D.C., Southern District of Florida) (``Ryder Court 
Answer'') at 2, ¶ 7.  
37  Joint Statement at 8, ¶ 46.
38  See,  e.g., Answer,  Ex. 4  (Memorandum In  Response to  AT&T 
Memorandum Concerning Filed  Tariff Doctrine,  Case No.  99-6688-
CIV-HIGHSMITH, filed Sept. 3,  1999, U.S.D.C., Southern  District 
of Florida) at  7 (stating  that any termination  charge owed  by 
Ryder ``would  simply  be  further damage  suffered  by  [Ryder].  
[Ryder] was prevented  from using the  minimum service by  AT&T's 
breach of  its billing  contract  with [Ryder].   Thus,  whatever 
amount [Ryder] is deemed to  owe AT&T for minimum services  under 
the tariff,  that  amount  is  another  element  of  the  damages 
suffered by [Ryder] as a result  of AT&T's breach of the  billing 
and  collection   contract.'');   Answer,  Ex.   7   (Plaintiffs' 
Memorandum In  Response to  AT&T's   Motion For  Partial  Summary 
Judgment, Case No.  99-6688-CIV-HIGHSMITH, filed  Oct. 10,  2000, 
U.S.D.C., Southern District  of Florida)  (``Ryder Opposition  to 
AT&T Partial Summary Judgment Motion'') at 16 (``AT&T should .  . 
. indemnify [Ryder] for all  contract tariff penalties caused  by 
[Ryder's] inability to continue as a business ($1,800,000.00)''); 
Answer, Ex. 19  (Plaintiffs' Notice  of Filing  of Proposed  Jury 
Instructions, Case  No.  99-6688-CIV-HIGHSMITH,  filed  Nov.  14, 
2000,  U.S.D.C.,  Southern  District  of  Florida),   Plaintiffs' 
Proposed Jury Instruction  No. 2 (stating  that ``direct  special 
damages''   to  Ryder  should  include  any  contract   penalties 
incurred by Ryder); Id., Ex.  17 (Trial Transcript, Case No.  99-
6688-CIV-HIGHSMITH, Dec. 21, 2000, U.S.D.C., Southern District of 
Florida) (``Trial Transcript'') at 178-180 (Court denying Ryder's 
request to instruct the jury  that Ryder was entitled to  recover 
early service termination charges as part of its damages).
39  Answer, Ex. 32 (Billing Services Agreement) at ¶¶ 12, 14.
40  In so ruling, the Court also held that, had Ryder shown  that 
AT&T's breach of the Billing  Agreement did, in fact,  constitute 
willful and  wanton  misconduct,  Ryder could  have  recouped  or 
cancelled its early service termination charges as  consequential 
damages  arising  from  AT&T's  breach.   Answer,  Ex.  5  (Order 
Determining Applicability of Filed Tariff Doctrine, Case No.  99-
6688-CIV-HIGHSMITH, Sept. 27,  1999, U.S.D.C., Southern  District 
of Florida) at 5;  Ex. 8 (Order  Granting Defendant's Motion  for 
Partial Summary Judgment, Case No. 99-6688-CIV-HIGHSMITH, Dec. 8, 
2000, U.S.D.C., Southern District of Florida) (``Partial  Summary 
Judgment Order'') at 4-5; Ex. 17 (Trial Transcript) at 178-180.  

41 Joint Statement at 9, ¶¶ 51-53; Answer at 37-40, 92-95, ¶¶ 76-
81, 181-87,  and  at  Ex.  8  (Partial  Summary  Judgment  Order) 
(``Partial Summary  Judgment Order'')  at 4-5.   The Court  found 
that,  although  AT&T's  billing  errors  may  have  amounted  to 
negligent or grossly  negligent performance of  its duties  under 
the Billing Agreement, they did not rise to the level of specific 
intent required by  the ``willful  and wanton''  standard to  set 
aside the limitation of liability provision under New Jersey law.  
The Court stated  that ``it  is uncontested  that Defendant  took 
prompt remedial action when  Ryder brought the accounting  errors 
to the attention  [of AT&T].''   Answer, Ex.  8 (Partial  Summary 
Judgment Order) at  4.  See  Answer at 46-47,  96-97, ¶¶   95-97, 
190-91 (citing Answer,  Ex. 17  (Trial Transcript)  at 180.   See 
also Answer at 53-54, 111, ¶¶  110, 218, and at corrected Ex.  27 
(Order, Case No. 99-6688-CIV-HIGHSMITH, Mar. 27, 2001,  U.S.D.C., 
Southern  District  of  Florida)  (denying  Ryder's  request  for 
prejudgment interest on its damage award, because AT&T, ``in good 
faith, continued to withhold the  monies owed to Plaintiff  Ryder 
Communications, Inc. once it became  evident that they were  owed 
due to  (a)  Plaintiff  Ryder's breach  of  the  parties'  tariff 
agreement and  (b)  the  tariff  agreement's  liquidated  damages 
provision.'').
42  Answer, Ex. 8 (Partial Summary Judgment Order) at 5  (stating 
that ``the  limitation of  liability provision  contained in  the 
Billing Agreement] must be given effect.''); Id., Ex. 20 (Court's 
Instructions to the  Jury, Case  No. 99-6688-CIV-HIGHSMITH,  Jan. 
31, 2001, U.S.D.C., Southern District  of Florida) at 12;   Joint 
Statement at 10, ¶ 60.
43  Answer, Ex. 23 (Final Judgment, Case No. 99-6688-CIV-
HIGHSMITH, Jan. 31, 2001, U.S.D.C., Southern District of Florida) 
at 1; Complaint, Ex. E-2 (Post-Trial Order) at 5; Answer at 45, 
48, ¶¶  93, 99.  The jury was not asked to make any finding, and 
did not make any finding, as to whether any breach of the Billing 
Agreement by AT&T was the proximate cause of Ryder's decision to 
close its business.  See Joint Statement at 11, ¶ 63; Answer at 
18, 48-49, ¶¶ 14, 99.
44  Complaint, Ex. E-2 (Post-Trial Order) at 7-8.   As far as  we 
can tell  from the  record,  Ryder did  not assert  this  alleged 
excuse until shortly  before trial.   See  Answer, Ex. 9  (Order, 
Case No. 99-6688-CIV-HIGHSMITH, Dec. 18, 2000, U.S.D.C., Southern 
District of Florida) at 2  (stating that gross negligence in  the 
provision of transport service could be an affirmative defense to 
AT&T's counterclaim); Joint Statement at 9, ¶ 54.
45  Complaint, Ex. E-2 (Post-Trial Order) at 4-5.
46 Complaint,  Ex.  E-2  (Post-Trial Order)  at  8.   See   Joint 
Statement at 11, ¶ 68;  Complaint, Ex. E-2 (Post-Trial Order)  at 
7-8.
47  Complaint, Ex. E-2 (Post-Trial Order) at 8.
48  Complaint, Ex. E-2 (Post-Trial Order) at 8-10.  According  to 
the Court,  under  CT 6831,  AT&T  sought damages  equivalent  to 
Ryder's MARC for the three year life of the contract tariff while 
under the early  service termination provision  in Tariff No.  1, 
Ryder would be responsible for one month's charges from the  date 
that AT&T received  Ryder's letter of  July 24, 1997  terminating 
service.  Id.  at  9.   The parties  dispute  whether  the  Court 
correctly assessed the difference  between the amounts due  under 
the early service termination provisions in CT 6831 and in Tariff 
No.  1.   See  Answer   at  51,  n.62;   Reply  Brief  of   Ryder 
Communications Regarding the Application  of Res Judicata,  Inc., 
File No.  EB-02-MD-038  (filed  Mar. 26,  2003)  at  13-16.   For 
purposes of  this proceeding,  we will  assume that  the  Court's 
calculation of the early service termination charges is correct.
49  Complaint, Ex. E-2 (Post-Trial Order) at 10.
50  Complaint, Ex. E-2 (Post-Trial Order) at 10.
51  Complaint,  Ex.  E-2  (Post-Trial  Order)  at  11.   See  id. 
(``...AT&T is granted judgment as a matter of law with respect to 
liability on its counterclaim against Ryder Communications,  Inc.  
This case, however, is referred  to the F.C.C. for  determination 
of the appropriate measure of damages on AT&T's counterclaim.''); 
Answer,   Ex.  24  (Partial   Judgment,  Case  No.   99-6688-CIV-
HIGHSMITH, Jan. 31, 2001, U.S.D.C., Southern District of Florida) 
(``Partial Judgment Order'') at  1(``Pursuant to the doctrine  of 
primary jurisdiction and this  Court's post-trial order,  damages 
for Ryder Communication, Inc.'s breach shall be determined by the 
Federal Communications Commission'').
52  The  parties first  discussed the  District Court's  referral 
order with Commission staff in  late 2001, but those  discussions 
ended, and neither party contacted Commission staff again until a 
procedurally insufficient version of  the Complaint was filed  on 
November 26, 2002. 
53  Complaint at  17, ¶¶ 36-39  (Count II), and  at Ex. D  (Legal 
Analysis) at 10, ¶¶ 26-27.  See Reply at 32-37, ¶¶ 64-75. 
54  Complaint  at 17,  ¶ 33-35  (Count I),  and at  Ex. D  (Legal 
Analysis) at 2-5, ¶¶ 5-12.  See Reply at 37-42, ¶¶ 76-86.
55  Ryder's  Complaint  contained  a third  claim  alleging  that 
enforcement of  the  early  service termination  penalty  was  an 
unlawful  tariff  practice  under  section  201(b)  of  the  Act.  
Complaint at 18,  ¶¶ 40-43.   The  parties later stipulated  that 
the third claim is withdrawn.  Joint Statement at 27, ¶154.
56  Complaint, Ex. E-2 (Post-Trial Order) at 9-10.  
57  Joint Statement at 27, ¶ 152.  
58  See, e.g., Interexchange Competition Order, 6 FCC Rcd at 
5897, 5899, 5902-03, ¶¶ 91, 103-04, 121, 126 (citing MCI Telecom. 
Corp. v. FCC, 917 F.2d 30, 37-38 (D.C. Cir. 1990) (MCI v. FCC)( 
holding that contract tariffs do not violate the Communications 
Act).  
59  Interexchange Competition Order, 6 FCC Rcd at 5902, ¶ 121.
60  See Answer at 72-74, ¶ 142-43, 146.
61  To avoid this kind of inefficiency in the future, we strongly 
recommend that parties in a court proceeding who receive a 
primary jurisdiction referral order that does not clearly define 
the matter(s) to be brought to the Commission seek clarification 
from the court before initiating Commission processes.
62  Our skepticism stems, in part, from the fact that, were we to 
grant one or both of Ryder's claims, as presently framed, AT&T's 
damages would likely diminish to zero, which would seem to 
contradict the Court's own rulings that Ryder could not recoup 
its early service termination payments as consequential damages 
for AT&T's breach of the Billing Agreement.  Thus, we suspect 
that, if the Court expected the parties to present any question 
other than the one addressed in Part III(A) above (and that is a 
big ``if''), the Court may have meant the question of whether a 
$1.6 million charge is unreasonable in amount, either in absolute 
terms or in relation to the discounts afforded to Ryder or the 
timing of Ryder's discontinuance within the three-year service 
period.  See Answer at 2.   Ryder declined to present that 
question in its Complaint, however.
63  Complaint, Ex. E-2 (Post-Trial Order) at 11, n.9.
64  We note  that this  is not a  situation where  a party  makes 
certain representations to  the court, and  then, upon  referral, 
makes contrary representations to the Commission.  Compare Haxtun 
Telephone Company v. AT&T  Corp.,  Memorandum Opinion and  Order, 
15 FCC Rcd 14895,  14898-902, ¶¶ 11-20  (Enf. Bur. 2000),  aff'd, 
Order on Review, 15 FCC Rcd 25260 (2000).
65   Complaint at 6-7, 9-13, 17, ¶¶ 12-13, 16-24, 36-39, and at 
Ex. D (Legal Analysis) at 1-2, 5-6, 9-10, ¶¶ 12-13, 23-24, 26-27; 
Reply at 10-15, ¶¶ 14-22.
66  Complaint at 11-12, 14-16, ¶¶ 20, 27, 31, and at Ex. D (Legal 
Analysis) at 1, 3, 5-6,  9 ¶¶  1, 8, 11-13, 24, 26-27; Reply at 
27, 32-37, ¶¶  53, 64-75.
67  Complaint at 11-12, 16-17,  ¶ 20-22, 31, 36-39; Ex. D  (Legal 
Analysis) at 2-5, ¶¶  5-12;  Reply at 32-37, ¶¶ 64-75.
68  We note at  the outset that, because  Ryder did not assert  a 
claim for relief  alleging the unlawfulness  of  CT 6831's  early 
service termination provision (either facially or as applied)  in 
its Court  Complaint,  AT&T raises  here  compelling  affirmative 
defenses of statute  of limitations and  claim preclusion  (i.e., 
res judicata).   Answer at  27, 54-67,  ¶¶ 49,  112-32; AT&T  Res 
Judicata Brief at 1-12.  Moreover, neither the jury nor the Court 
found that  AT&T's breach  of the  Billing Agreement  proximately 
caused Ryder to go out of business, Joint Statement at 11, ¶  63, 
Answer at 107-08,  115, ¶¶  211, 225, and  Ryder presents  little 
probative evidence of such causation  here.  Complaint at 7,  11, 
¶¶ 13, 20, and at Ex. H (Ryder Affidavit) at 4-7, ¶¶ 25-34; Reply 
at 14-15, ¶ 22; contra Answer at 21, 107-08, ¶¶ 20, 211.  Because 
our conclusions against Ryder rest on other grounds, however,  we 
need not and do not reach these issues.
69 Complaint at 3-5, 9, ¶¶ 7, 9, 16; Reply at 9, ¶ 11 (``The 
issues raised in this proceeding involve two specific 
interrelated and interdependent agreements, which were presented 
to Ryder as a package deal. . . . These agreements were symbiotic 
and worked in concert to support the single business relationship 
between the parties....''); Reply at 11-12, ¶ 16 ( noting ``the 
interrelatedness of the parties' agreements''); Joint Statement 
at 13-14, 15 ¶¶ 83-84, 91 (Complainant's separate statement of 
disputed facts). 
70  Answer at 7, 76-77, 101, ¶¶ 151, 199.
71   Answer,  Ex.  32  (Billing  Services  Agreement)  at  ¶  12, 
``Tariffed Services.''
72   Answer, Ex.  32  (Billing Services  Agreement) at  ¶  18(G), 
``General;'' Answer, Ex. 8 (Partial Summary Judgment Order) at 3-
5.
73  Answer, Ex. 8 (Partial Summary Judgment Order) at 4-5.
74  Indeed, at one point in its pleadings, Ryder appears to 
concede that it cannot use AT&T's breach of the Billing Agreement 
to avoid liability for the early service termination charge.  
Reply Brief of Ryder Communications, Inc. Regarding the 
Application of Res Judicata, File No. EB-02-MD-038 (filed Mar. 
26, 2003) (``Res Judicata Reply Brief''), at 2 (``Ryder does not 
contend that `it should be allowed to use AT&T's breach of the 
BSA (billing service  agreement) to avoid liability for the 
termination charges due under the discontinuance provision of CT 
6831.'  Rather, Ryder asserts ...that AT&T's actions - as a whole 
- were so harmful and derelict that to permit a carrier to 
recover a termination penalty under these circumstances would be 
unjust and unreasonable, in contravention to the Act and 
Commission orders...'').  We fail to see, on this record, how 
Ryder's referral to AT&T's actions ``as a whole'' could refer to 
anything other than AT&T's breach of the Billing Agreement.  In 
fact,  Ryder summarizes its entire case by requesting that the 
Commission find that ``AT&T, through its failure to fulfill its 
obligations and sustained erroneous billing, acted unreasonably 
in its creation of the very situation from which it now hopes to 
profit.''  Complaint at 12, ¶ 20. 
75  See, e.g., American Telephone and Telegraph v. Central Office 
Telephone, 524 U.S. at 221-27.
76  See, e.g., Reply at 32, ¶ 65 (``The Commission should reject 
the argument AT&T has offered; that simply because the law 
recognizes the existence of a discontinuance provision, that it 
should be free to impose it without condition or consideration of 
its own actions.'').  See also Reply at 4, 36-37, ¶¶ 74-75; Ryder 
Res Judicata Brief at 2 (both stating generally that the 
Commission need not disturb the findings of the Court, but must 
still find that the harm inflicted by AT&T makes enforcement of 
the early service termination provision unreasonable).
77  Reply at 25-32, ¶¶ 46-63 (citing Federal Power Commission v. 
Sierra Pacific Power Co., 350 U.S. 348 (1956); United Gas 
Pipeline Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956); 
IDB Mobile Communications, Inc. v. COMSAT Corp., Memorandum 
Opinion and Order, 16 FCC Rcd 11,474 (2001) (``IDB  v. 
COMSAT'')).     
78  See, e.g., IDB  v. COMSAT,  16 FCC Rcd at 11480-81, ¶¶  14-15 
(and cases cited  therein).  We reference  the principles of  the 
Sierra-Mobile doctrine because the Commission has never  squarely 
held that  the doctrine  applies to  contract tariffs  between  a 
carrier and a non-carrier, as  opposed to a contract or  contract 
tariff between a carrier  and another carrier.  Nevertheless,  as 
the parties each assert  (Answer at 102-07,  ¶¶ 201-10; Reply  at 
25-32, ¶¶ 46-63), we see no reason why the principles  underlying 
the doctrine should not have similar, if not equal, applicability 
in both contexts.  See Global  Access Limited v. AT&T Corp.,  978 
F. Supp. 1068  (S.D. Fla. 1997)  (holding that the  Sierra-Mobile 
doctrine applies to  contract tariffs between  carriers and  non-
carriers).  Thus, without actually holding that the Sierra-Mobile 
doctrine governs, we examine the  facts here in light of  Sierra-
Mobile principles, as both parties urge us to do.  Answer at 103-
07,  ¶¶  203-210;  Reply  at  26-29,  ¶¶  50-56.   Cf.   Echostar 
Communications   Corporation   v.   Fox/Liberty   Networks   LLC,  
Memorandum Opinion and Order, 13 FCC Rcd 21841, 21849, ¶ 20 (Cab. 
Serv. Bur.  1998)  (finding,  independent  of  the  Sierra-Mobile 
doctrine,  that   public  policy   requires  minimal   regulatory 
interference with private  contracts entered  into by  consenting 
parties);  Petition  of  WorldCom,   Inc.  Pursuant  to   Section 
252(e)(5)  of  the  Communications  Act  for  Preemption  of  the 
Jurisdiction  of  the   Virginia  State  Corporation   Commission 
Regarding Interconnection  Disputes with  Verizon Virginia  Inc., 
and For  Expedited Arbitration,  et al.,  Memorandum Opinion  and 
Order, 17  FCC Rcd  27039, 27206,  ¶ 348  (Com. Car.  Bur.  2002) 
(declining to invalidate the early service termination provisions 
contained in Verizon's  special access tariffs,  and noting  that 
AT&T had voluntarily purchased  special access services  pursuant 
to Verizon's filed tariff and took advantage of discount  pricing 
plans  that  offered  lowered  rates  in  return  for  a   longer 
commitment).
79  IDB  v. COMSAT, 16 FCC Rcd at 11480, ¶ 15 (and cases cited 
therein).
80 See, e.g., IDB v.  COMSAT, 16 FCC Rcd  at 11480-81, ¶ 16  (and 
cases cited therein).
81  Complaint  at  Ex.  H (Affidavit  of  David  Ryder)  (``Ryder 
Affidavit'') at 3, ¶¶  19-20; Reply at 12,  28, ¶¶ 17, 54,  Joint 
Statement at 15, ¶¶ 92, 95 (Complainant's Disputed Facts).
82  Answer at 105-06, ¶  206, and at Ex.  40 (Decl. of Laurie  B. 
Brown, File No. EB-02- MD-038, filed Feb. 3, 2003)  (``AT&T Brown 
Decl.'') at 1-2. 
83  Answer at 72-74, 105-07, ¶¶ 142-43, 146, 206, 209, and at Ex. 
40 (AT&T Brown Decl.) at 1-2.   See also Joint Statement at 4,  ¶ 
20 (``CT  6831 provided  that in  exchange for  receiving  volume 
discounts from  AT&T,  Ryder  committed to  take  MultiQuest  900 
service from AT&T for a period of three years, and to pay AT&T at 
least a Minimum  Annual Revenue Commitment  of $600,000 for  each 
year of the term.'') (emphasis added).
84  In  fact,  at  least  two  federal  courts  of  appeals  have 
expressed skepticism  about the  relevance of  uneven  bargaining 
power in Sierra-Mobile analysis.   IDB v. COMSAT,  16 FCC Rcd  at 
11486, n.70 (and cases cited therein). 
85  Reply at 27-29, 31-32,  ¶¶ 53-56, 62-63.
86  Answer at 99-100, ¶¶ 195-96; Supplemental Answer at 24, ¶ 58.
87   Complaint at 3-5,  9 ¶¶ 7,  9, 16; Reply at  9, ¶ 11  (``The 
issues  raised   in   this  proceeding   involve   two   specific 
interrelated and interdependent agreements, which were  presented 
to Ryder as a package deal. . . . These agreements were symbiotic 
and worked in concert to support the single business relationship 
between the parties...''); Reply at  11-12, ¶ 16 (``As  evidenced 
by  the  interrelatedness  of  the  parties'  agreements,   Ryder 
Communications  was  dependent  on  AT&T's  performance  of   its 
contractual  obligations  in  order  to  conduct  its   business.  
Ryder's ability to offer 900 number service to customers, pay for 
the  communications  transport,  and  receive  monies  for  those 
services,  was  dependent  upon   AT&T  fulfilling  all  of   its 
contractual obligations.''); Joint Statement at 13-14, 15 ¶¶  83-
84, 91 (Complainant's separate statement of disputed facts). 
88  Although  the  parties  usually refer  to  a  single  billing 
agreement, they both  acknowledge (as  did the  Court) that  they 
actually entered  into  a  series  of  agreements  pertaining  to 
billing matters.  Reply at 9, 12, n.42-43; Answer at 107,  n.127; 
Joint Statement at  6, ¶¶ 31-32;  Complaint, Ex. E-2  (Post-Trial 
Order) at 2,  n.1.  Thus, Ryder  had numerous opportunities  over 
the years to seek a different allocation of the risk of a  breach 
by AT&T. 
89  Answer at 106, ¶ 208.
90  Reply at 4 (``...neither the  Court nor Ryder have asked  the 
Commission to engage in any review, or to make any determinations 
with regard  to issues  that  have already  been decided  by  the 
Court,  or  that  are  subject  to  appeal,  such  as  the   jury 
instructions or application of New Jersey's `willful and  wanton' 
standard.'').  See Reply at 36-37, ¶¶ 74-75.
91  Complaint at 17, ¶¶33-35, and at Ex. D (Legal Analysis) at 3-
5, ¶¶ 8-12; Reply at 37-42, ¶¶ 76-86.  
92  See, e.g., Southwestern Bell Telephone Company Tariff F.C.C. 
No. 68, Tr. No. 1921, Order, 5 FCC Rcd 2523 (Com. Car. Bur. 1990) 
(``SWB Tr. No. 1921 Order''); Southwestern Bell Telephone Company 
Tariff F.C.C. No. 68, Tr. No. 1963, Order, 5 FCC Rcd 3790 (Com. 
Car. Bur. 1990) (``SWB Tr. No. 1963 Order'') (both allowing five 
year service contract containing early service termination 
provision that required the customer to pay charges as if minimum 
volume commitment would be met, minus Southwestern Bell's 
interstate special access authorized rate of return at the time 
of the termination); AT&T Communications Revisions to Tariff 
F.C.C. No. 1, Tr. No. 2422, Order, 5 FCC Rcd 5988 (Com. Car. Bur. 
1990) (``AT&T Tr. No. 2422 Order'') (allowing long term service 
plans that required customers who discontinued service prior to 
the end of the plan to pay shortfall charges for the remainder of 
the term, and also required repayment of the discounted amounts 
customers paid for years in which they actually purchased 
service); AT&T Communications Tariff F.C.C. Nos. 2 and 14, Tr. 
Nos. 4974, 5149, and 5383, Order, 8 FCC Rcd 4543 (Com Car. Bur. 
1993 (``AT&T  Tr. No. 4974 Order'')  (allowing 800 service term 
plans containing early service termination provisions that 
required customers who discontinued service prior to the end of 
the plan to pay charges based on a percentage of the remaining, 
unfulfilled commitments).  See also Telecom International 
America, Ltd. v. AT&T Corp., 67 F. Supp.2d 189, 219-221 (S.D.N.Y. 
1999), aff'd in part, rev'd in part on other grounds, 280 F.3d 
175, 189-90, 193 (2nd Cir. 2001) (upholding the validity of a 
shortfall provision that obligated the customer to pay 
termination charges if it failed to purchase a minimum amount of 
communications services during the three year term of the 
contract tariff).    
93  See, e.g., SWB Tr.  No. 1921 Order, 5 FCC  Rcd at 2523, ¶  1; 
SWB Tr. No. 1963 Order, 5 FCC Rcd at 3790, ¶ 1; AT&T Tr. No. 2422 
Order, 5 FCC Rcd at  5988, ¶ 2 ; AT&T  Tr. No. 4974 Order, 8  FCC 
Rcd at  4543, n.4-5.    See also  Telecom International  v.  AT&T 
Corp., 67 F. Supp.2d at  219-221.  Ryder has emphasized that  its 
complaint does not dispute the  actual amount of the  termination 
charges required under the early service termination provision in 
CT 6831.   Reply at 33, ¶ 67.  
94  See, e.g., Interexchange Competition Order, 6 FCC Rcd at 
5902, ¶ 121; SWB Tr. No. 1921 Order, 5 FCC Rcd at 2523, ¶ 1; SWB 
Tr. No. 1963 Order, 5 FCC Rcd at 3790, ¶ 1; AT&T Tr. No. 2422 
Order, 5 FCC Rcd at 5988, ¶ 2 ; AT&T Tr. No. 4974 Order, 8 FCC 
Rcd at 4543, n. 4-5.  See also Telecom International v. AT&T 
Corp., 67 F. Supp.2d at 219-221.
95  See generally 800 Presubscription Rules for 800 Providers and 
Responsible Organizations,  Order, 8  FCC Rcd  7315, 7317,  ¶  18 
(Com. Car. Bur. 1993). 
96  Complaint,  Ex.  E-6  (CT  6831)  at  Section  1,  ``Services 
Provided;'' Answer,  Ex.  28 (Tariff  No.  1) at  Section  2.3.1, 
``Liability.''  Ryder does not dispute that CT 6831  incorporates 
this section of Tariff No. 1.
97  See Complaint, Ex.  D (Legal Analysis) at  5, ¶ 12; Reply  at 
40, ¶ 83.
98   Complaint at 14-16; ¶¶ 25-30, and at Ex. D (Legal  Analysis) 
at 7-10, ¶¶ 19-27; Reply at 37-42, ¶¶ 77-86.
99   See generally 47 U.S.C. § 203.
100  Complaint, Ex. D  (Legal Analysis) at  4-5, ¶¶ 9-10  (citing 
Local Exchange Carrier Line  Information Database, CC Docket  No. 
92-24, Order, 8  FCC Rcd  7130, 7134-35, ¶¶  27 (1993)  (allowing 
local  exchange  carriers  to  maintain  general  limitation   of 
liability provisions that do not  shield them from liability  for 
willful misconduct or gross negligence for incorrect calling card 
validations);  Annual  1985  Access  Tariff  Filings,  Memorandum 
Opinion and  Order, 2  FCC  Rcd 1416,  1423-24, ¶¶  66-72  (1987) 
(requiring  local  exchange  carriers  to  apply  their   general 
liability  provisions  holding   them  responsible  for   willful 
misconduct or gross  negligence for  presubscription errors,  and 
declining to  require  them  to modify  their  general  liability 
provisions to  ensure that  they do  not disclaim  liability  for 
ordinary negligence  for  assigning  an end  user  to  the  wrong 
interexchange carrier);  UNIMAT,  Inc.  v.  MCI  Telecom.  Corp., 
Order, 14 FCC Rcd 7829, 7835, ¶ 14  (Com. Car. Bur. 1999) (noting 
that an otherwise reasonable limitation of liability clause  that 
addresses the carrier's liability for mis-dialed toll-free  calls 
will  not   shield   the   carrier  from   liability  under   the 
reasonableness standard  of  the  Act  in  the  case  of  willful 
misconduct or  gross negligence  by  its employees  or  agents)).   
See Reply at 39-40, ¶ 82.
101  Complaint, Ex. D (Legal Analysis) at 4-5, ¶¶ 9-11; Reply at 
39-40, ¶ 82.